Three Characteristics Of The Traditional Chinese Economy In The Republic Of China

1750 Words 7 Pages
Before 1911, China was still under absolute monarchy, which was Qing Dynasty. The economy during that period was agricultural based, not by trading or colonies. Unlike Western countries, there was no industrial revolution happened in China. Due to the closed economy (or self seclusion), China did not receive any new technology to improve the developments in many areas.
There are three characteristics of the traditional Chinese economy before 1911. The first characteristic is highly productive agriculture. Due to the high population, food supply was the priority thing to concern at that period. Also, there were many labor and land (as we know that there was no tall buildings and railway network in China at that time). This caused a high productive
…show more content…
At the beginning of Republic of China, the most noticeable thing was Chinese civil war which recorded the fought between Kuomintang-lead government and Communist Party of China. This war was lasted 15 years, Communist Party of China won the fought finally and the leader, Mao Zedong, implemented socialism to society which characterized by social ownership of the means of production and co-operative management of the economy system. In 1978, Deng Xiaoping advocated a new economy system which lends the capitalism into market economy called “socialism with Chinese characteristics”. This economy system means open currency, harbor, and international trade. The economic reform made China has experienced rapid economic growth. Such as, China’s Gross Domestic Product is growing up from 225 U.S. dollar to 6000 U.S. dollar in 1978 to 2012. Moreover, China became a largest exporter in the world which behind European Union and United States in 2013. The reason is China has a large resource of labors, cheap salary costs, and good associated industries. Base on these advantages, Chinese become richer and they spend the money to buy foreign currency, it makes China is the largest single holder of U.S government debts. These show Chinese economic is attractive in the world and having a strong relationship with other …show more content…
Export Processing Zones is a type of free trade zone and set up by government to promote exports without fundamentally overturning the structure of protection in place for domestic manufacturers. It provides a good opportunity for people to create their business ambitions. The first EPZ in Asia was set up in Taiwan in 1965 and it increased to 35 EPZs in Asia after 15 years. Those zones offer an incentive from certain taxes and business regulations to enhance international market system. The purpose of set up EPZs is components and raw materials can be imported duty-free, and exports leave the zone without export or sales taxes. Each country can exports the good which it has comparative advantage and imports the good which it has comparative disadvantage. This trade allows countries to specialize and further exploit the benefits of comparative advantages. The successful of EPZs attracted China to set up Special Economic Zones (SEZs). It was part of the early development of the export-processing regime. The main areas of SEZs are Guangdong (near Hong Kong) and Fujian (near Taiwan) because of geographical environment. The purpose of set up SEZs is similar to EPZs; China has comparative advantage in unskilled labor, and comparative disadvantage in skilled labor, capital, and land. Thus

Related Documents